BILL ANALYSIS
SB 1838
Page 1
Date of Hearing: June 27, 2006
ASSEMBLY COMMITTEE ON HEALTH
Wilma Chan, Chair
SB 1838 (Perata and Florez) - As Amended: June 21, 2006
SENATE VOTE : 39-0
SUBJECT : Health facilities: construction plans.
SUMMARY : Authorizes the Office of Statewide Health Planning and
Development (OSHPD) to establish a training program for
personnel who review hospital construction and design plans,
exempts hospital and skilled nursing facility projects that cost
less than $50,000 from the OSHPD plan review process, and
requires a presubmittal meeting with OSHPD plan review staff on
hospital and skilled nursing facility projects costing over $20
million.
1)Authorizes OSHPD to establish a training program to ensure
that a sufficient number of qualified persons are available to
facilitate the timely performance of OSHPD's duties and
responsibilities relating to the review of plans and
specifications pertaining to the design and construction of
hospital buildings and buildings described below to ensure
compliance with applicable fire and life safety codes and
standards:
a) Any building used, or designed to be used, for a skilled
nursing facility or intermediate care facility if the
building is of single-story, wood-frame or light steel
frame construction; and,
b) Any building of single-story, wood-frame or light steel
frame construction where only skilled nursing or
intermediate care services are provided if the building is
separated from a building housing other patients of the
health facility receiving higher levels of care.
2)Authorizes OSHPD to exempt from its plan review process
construction or alteration projects for buildings described in
#1) above with estimated construction costs of $50,000 or
less. Includes, but does not limit in the criteria for
exemption, plans that have been stamped and signed by the
design professionals of record.
3)Requires OSHPD to issue plan approval for projects that meet
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the criteria established in #2) above. Prohibits projects
that have been split into a series of smaller projects in
order to avoid the qualifying dollar limits from being
approved. Requires OSHPD to maintain its construction
observation mandate to ensure public safety and California
Building Standards Code compliance for approved projects.
4)Requires a presubmittal meeting between OSHPD and the design
professionals for construction or alteration projects for the
buildings described in #1) above with estimated construction
costs of $20 million or more.
5)Authorizes OSHPD to adopt regulations for this bill to make
specific the exemption criteria and processes authorized
pursuant to #2) above and the complete plan review process
required pursuant to #3) above.
EXISTING LAW :
1)Establishes the Alfred E. Alquist Hospital Facilities Seismic
Safety Act (Act), and its amendments, which require:
a) After January 1, 2008, any general acute care hospital
building that is determined to be a potential risk for
collapse or significant loss of life to only be used for
nonacute care hospital purposes. Authorizes a delay to be
granted by the OSHPD upon a demonstration that compliance
will result in a loss of health care capacity.
b) OSHPD to authorize extensions to the deadline described
in a) above, if the hospital agrees that by January 1,
2013, designated services will be provided by moving into
an existing conforming building, relocating to a
newly-built building, or continued in the retrofitted
building, as specified.
c) No later than January 1, 2030, owners of all acute care
inpatient hospitals to demolish, replace, or change
nonacute care use of all hospital buildings not in
substantial compliance, and seismically retrofit all acute
care inpatient hospital buildings so that they are in
substantial compliance.
d) Any hospital eligible for an extension described in a)
and b) above, to meet the January 1, 2030 deadline.
2)Establishes, within OSHPD, a Hospital Building Safety Board to
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advise the director and act as a board of appeals in all
matters relating to the administration and enforcement of
building standards relating to the design, construction,
alteration, and seismic safety of hospital building projects
submitted to OSHPD.
3)Requires OSHPD to pass upon and approve or reject all plans
for the construction or the alteration of any hospital
building, independently reviewing the design to assure
compliance with the requirements of existing law.
4)Requires OSHPD to review the structural systems and related
details, including the independent review of the geological
data, which must be reviewed by an engineering geologist, and
structural design data, which must be reviewed by a structural
engineer.
5)Requires, whenever OSHPD finds a violation of existing law, as
specified, that requires correction, a citation of the
violation to be issued to the hospital governing board or
authority in writing and to include a proper reference to the
regulation or statute being violated.
6)Exempts specified single story wood or light steel framed
hospital buildings from plan review and inspection by OSHPD
prior to construction if the facility demonstrates to OSHPD
that the construction or alteration:
a) Is undertaken to repair existing systems or to keep up
the course of normal or routine maintenance;
b) Restores the facility to the same operational status, or
improves operational status from its condition prior to the
event, occurrence, or condition that necessitated the
alteration;
c) Is not ordinarily within the standard of practice of a
licensed architect or registered engineer; and,
d) Does not degrade the status of the system as it operated
immediately prior to the event, occurrence or condition
that necessitated the alteration.
7)Requires OSHPD, prior to the use of an exempted hospital
building pursuant to #6) above, to inspect and approve the
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work. Permits OSHPD to require an interim inspection for code
compliance when walls, ceilings, or other materials or
finishes will cover the final work. Upon compliance, requires
OSHPD to issue a building permit.
8)Creates a project to demonstrate and evaluate a plan review
process for multistory hospital buildings that would exempt
specified repair and maintenance projects from
pre-construction review and inspection by OSHPD. Requires
OSHPD to prepare a comprehensive report to the Legislature by
March 1, 2008. Sunsets this provision on January 1, 2009.
FISCAL EFFECT : Unknown
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, hospitals are
among the most complex and expensive buildings to design and
construct, and in recent years California has required
hospitals to comply with new and extensive earthquake safety
requirements. Plans for hospital construction and seismic
safety standards must be reviewed and approved by OSHPD. The
review of hospital plans has been slowed in recent months by a
shortage of trained Fire and Life Safety officers. Hospital
construction plans now receive mechanical, electrical,
structural, architectural and fire/life safety reviews. OSHPD
reports that fire and safety review officers are the most
affected by staff shortages and the most difficult positions
to fill. This bill authorizes OSHPD to establish a Fire and
Life Safety training program to increase the number of capable
reviewers and speed approval of hospital design plans.
This bill also exempts hospital and skilled nursing facility
projects that cost less than $50,000 from the OSHPD plan
review process, which would allow OSHPD to prioritize staff
resources on major projects without jeopardizing public
safety. To qualify for exemptions, plans will be required to
be stamped and signed by design professionals of record. This
will result in immediate issuance of a building permit by
OSHPD, and continued field observation, which will allow OSHPD
to maintain control over construction and ensure public safety
and compliance with the code. According to the author, the
value of these projects is low, so the consequences of error
is less and therefore does not pose as great a risk to
patients and staff. In 2005, OSHPD approved 955 projects
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under $50,000 with an average plan review turnaround time of
1.7 months, which represents 51% of approved projects and 12%
of OSHPD's resources. This bill would allow plan review staff
to be redirected to larger projects and, when appropriate to
field review.
Finally, this bill would require pre-submittal involvement by
OSHPD plan review staff on projects for hospital and skilled
nursing facility projects costing $20 million or more. This
process would potentially reduce turnaround on these types of
projects by 20%. In 2005, OSHPD approved 10 projects of $20
million or more with a plan review turnaround time of 20
months, which represents 1% of approved projects and 14% of
OSHPD's resources.
2)BACKGROUND . The Act, originally passed in 1973 and updated in
1983, requires all new hospital construction to meet building
standards specifically designed for hospital buildings. These
standards, however, were not originally applied to hospitals
built before March 1973, except when those existing buildings
undergo major renovations.
Following the 6.7 magnitude Northridge earthquake in January
1994, the Legislature passed and then-Governor Wilson signed
into law SB 1953 (Alquist), Chapter 740, Statutes of 1994.
Hospitals built in accordance with the standards of the Act
resisted the 1994 Northridge earthquake with minimal
structural damage, while several facilities built before the
Act experienced major structural damage and had to be
evacuated. In addition, certain nonstructural components of
the hospitals did incur damage, even in facilities built in
accordance with the structural provisions of the Act.
SB 1953 applies to all existing hospital buildings, and the
provisions and subsequent regulations implementing SB 1953
were developed to address the issues of survivability of both
nonstructural and structural components of hospital buildings
after an earthquake. By January 1, 2008, buildings posing a
significant risk of collapse and a danger to the public must
be brought up to the seismic performance category (SPC) 2 or
be removed from acute care service. By January 1, 2030,
hospital buildings must be in substantial compliance with the
structural provisions of the Act. The public safety benefit
of SB 1953 is to have general acute care hospital buildings
that not only are capable of remaining intact after an
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earthquake, but also capable of continued operation and
provision of acute care medical services after an earthquake.
3)REQUESTS FOR DEADLINE EXTENSIONS . As of March 30, 2006,
approximately 450 acute care hospitals were serving patients
in California and of those, 248 had submitted requests, and
201 had received approvals for seismic safety compliance
extensions until 2013. Hospitals have until January 1, 2007
to request an extension.
4)OSHPD 2005 REPORT . According to a 2005 OSHPD report,
California's Hospital Seismic Safety Law - Its History,
Implementation and Progress there is $10 billion in hospital
planning and construction under way in California. There are
1,693 projects valued at $4.4 billion under review at OSHPD.
Another 2,651 projects valued at $4.6 billion have received
plan approval and are under construction. Since enactment of
SB 1953, 53 hospitals have constructed new or replacement
buildings. While the new buildings meet the requirements of
the law, there may be older buildings on the same hospital
campus that may not yet comply.
7)ESTIMATED COST TO COMPLY . The California HealthCare
Foundation commissioned RAND to estimate the compliance costs
of SB 1953 for California hospitals. RAND found that
approximately 50% of California's hospital buildings will need
to be retrofitted, reconstructed or closed over the years
leading to 2030. RAND estimated the total expenditures by
hospitals to be as large as $41.7 billion. However, the
study points out that actual compliance costs may be more like
$3 billion. According to RAND, the average age of the
affected buildings will be between 45 and 49 years, and their
analysis indicates that the approximate lifespan for a
California hospital is 40 to 50 years old. The study suggests
that much of the $41.7 billion would be normal hospital
construction and modernization. The study also notes recent
construction trends and financial data from the hospital
industry indicate that such a modernization program for
California hospitals may be unlikely. RAND is conducting
another study to attempt to get a better estimate of actual
compliance costs. The challenge is to determine which costs
are attributable to the seismic requirements versus other
government requirements, modernization, and other costs not
specific to compliance with the Act.
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CHA commissioned a January 2006 report prepared by a
construction cost planning firm, Davis Langdon, which
indicates that construction costs for hospitals have increased
66% in three years (between 2003 and 2006) from $330 a square
foot to $550 a square foot. According to the report,
construction costs have risen for all types of construction in
California, but increases in healthcare construction are
significantly higher than other building types, and healthcare
facilities in California have higher costs than in other
states. The report attributes the cost escalation figures to
a variety of factors; most significant among them is the high
demand for construction services across the state and in
neighboring states. Additionally, health care construction
requires specialized contractors who are limited in supply.
The report discusses a perception in the construction
community that regulatory inspection and enforcement disrupt
productivity and increase cost risks to the contractor. In
addition, the schedule of health care projects because they
are large and complex and involve interface with ongoing
operations also creates risks for contractors. The Davis
Langdon report states that while material cost increases have
received much attention, increases in material and labor costs
make up a small portion of the overall cost increase.
8)RELATED LEGISLATION .
a) SB 167 (Speier) would permit delays of the 2008 seismic
safety deadline for specified hospitals that do not exceed
maximum allowable seismic risk, as determined by OSHPD, and
would expedite the final compliance deadline to 2020 for
hospitals granted the delay. SB 167 failed passage in the
Assembly Health Committee last year, was granted
reconsideration, and is scheduled for reconsideration on
June 27, 2006.
b) SB 1659 (Cox) would authorize OSHPD to permit electronic
submission of seismic construction plans, and require OSHPD
to adopt, and the California Building Standards Commission
approve, regulations amending the Mechanical Code to
address ventilation issues in toilet facilities. SB 1569
is also scheduled to be heard in the Assembly Health
Committee on June 27, 2006.
c) SB 1661 (Cox) would permit OSHPD to grant up to two
additional years of extensions for a hospital that has
received an extension of the 2008 deadline, as specified,
if the hospital building meets specified criteria that
demonstrate a good faith effort by the hospital to comply
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with the Act. SB 1661 is pending in the Senate
Appropriations Committee.
9)PREVIOUS LEGISLATION .
a) SB 225 (Chesbro), Chapter 494, Statutes of 2005, creates
a project to demonstrate and evaluate a plan review process
for multistory hospital buildings that would exempt
specified repair and maintenance projects from
pre-construction review and inspection by OSHPD.
b) AB 2973 (Cohn) of 2004 would have established a
temporary process for Independent Plan Reviewers (IPRs) to
submit hospital construction plans to the OSHPD for
projects with construction costs over $50 million, and if
there is an undue delay, projects between $20 million and
$50 million. AB 2973 would have required OSHPD to make
every effort to perform a review of IPR submitted plans
within 90 days. The bill also would have prohibited the
imposition of a hiring freeze from applying to positions
supported by the Hospital Building Fund to implement the
Hospital Facilities Seismic Safety Act and exempted these
positions from 2002 hiring freeze directives, as specified.
AB 2973 was vetoed by the Governor. In his veto message,
the Governor stated:
"Although AB 2973 attempts to address the potential for
delays of hospital construction projects, I am unable to
agree with the proposed exemptions to future, potential
hiring freezes and position vacancy management. Such
personnel management flexibility is
necessary given the current significant fiscal constraints
of the state and these provisions would create a precedent
that could hamper the ability of my Administration to
address such fiscal concerns in the future."
10) SUPPORT . The California Hospital Association (CHA) writes
in support that the Facilities Development Division (FDD) of
OSHPD has experienced difficulties finding individuals to fill
these key positions, and given the specialized expertise
needed by these individuals, FDD has experienced challenges
finding candidates that need little training. Without these
key personnel, project review at FDD can begin to lengthen,
costing hospitals millions. CHA asserts that for a $100
million project, a one month delay can add $1-2 million to the
cost of the project, and longer backlogs add millions more.
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11) POLICY QUESTIONS .
a) It is not clear why legislative authorization is needed
for OSHPD to establish a training program for fire and
safety officers. The committee may wish to ask the author
and proponents why such authorization is needed.
b) Is it prudent to require OSHPD to issue plan approval
for projects that its staff has not reviewed? Is it
necessary for plan approval to be issued or should
provisional plan approval be granted pending a field
review?
REGISTERED SUPPORT / OPPOSITION :
Support
California Hospital Association
Opposition
None on file.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097